November 25, 2008
Via EDGAR
Securities and Exchange Commission
100 F. Street, N.E.
Washington, D.C. 20549
Attention: Melissa Duru
| Re: | Wendy’s/Arby’s Group, Inc. | |
| Schedule TO-T filed November 6, 2008 by Trian Partners, L.P., Trian | ||
| Partners Master Fund, L.P., Trian Partners Parallel Fund I, L.P, Trian | ||
| Partners Parallel Fund II, L.P., Trian Partners GP, L.P., Trian | ||
| Partners General Partner, LLC, Trian Partners Parallel Fund I | ||
| General Partner LLC, Trian Partners Parallel Fund II GP, L.P., Trian | ||
| Partners Parallel Fund II General Partner, LLC, Trian Fund | ||
| Management L.P., Trian Fund Management GP, LLC (collectively, the | ||
| “Trian Funds”), Nelson Peltz, Peter W. May and Edward Garden | ||
| (collectively, the “Trian principals”). File No. 05-30388 |
Ladies and Gentlemen:
On behalf of our client, Trian Partners, L.P., Trian Partners Master Fund, L.P., Trian Partners Parallel Fund I, L.P. and Trian Partners Parallel Fund II, L.P. (collectively, the “Purchaser”), we are submitting this letter in response to the written comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”), dated November 17, 2008 (the “Comment Letter”), with respect to the Purchaser’s Schedule TO-T filed with the Commission on November 6, 2008 (SEC File No. 05-30388) (the “Schedule TO”) in connection with its offer to purchase (the “Offer”) up to 40,000,000 outstanding shares of common stock, par value $0.10 per share, of Wendy’s/Arby’s Group, Inc. (“Wendy’s/Arby’s”).
Set forth below are the headings and text of the comments raised in the Comment Letter, followed by the Purchaser’s responses thereto. Capitalized terms used but not otherwise defined herein have the respective meanings ascribed to them in the Purchaser’s Offer to Purchase, filed as Exhibit (a)(1)(A) to the Schedule TO (the “Offer to Purchase”). We have also included the requested Purchaser statement below.
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In addition, we are simultaneously filing Amendment No. 1 to the Schedule TO (“Amendment No. 1”) amending the Schedule TO disclosure in response to the Comment Letter.
Schedule TO
General
| 1. | We refer you to Section 3.1 (a) of the agreement dated November 5, 2008between the filing persons and the company. The agreement specifically states“for the avoidance of doubt, nothing contained herein shall prohibit anymember of the Trian Group or any Affiliate or Associate of the Trian Groupfrom acquiringmorethan...” 25% of the combined voting power of thecompany’s voting securities. We refer also to the Schedule 13D/A filed onSeptember 16, 2008 in which the filing persons disclosed their intentions toincrease their equity ownership in the company and/or Wendy’s International,Inc. and note that subsequent to that filing, the filing persons have acquiredshares in the open market and indicated an interest in increasing their shareownership from approximately 11% to as much as 35% of outstanding votingshares. We also note that while the provisions of the agreement between theparties and the Delaware General Corporate Law would prohibit the filingpersons from engaging in a business combination within three years ofacquiring greater than 25% of the outstanding shares of voting securities, theprohibition does not appear to prevent the filing persons from acquiring acontrolling interest and then effecting a going private transaction throughmeans other than a business combination (i.e. a reverse stock split). Althoughthe filing persons disclose on page 21 of the Offer to Purchase that they do notcurrently intend to take actions that would result in a going private effect asdescribed in Exchange Act Rule 13e-3(a)(3)(ii), please confirm in your responseletter and within the disclosure that the tender offer is not the first step in aseries of transactions undertaken with the purpose or reasonable likelihood ofproducing a “going private effect” as specified in Rule 13e-3. |
Response
On behalf of the Trian Funds and Trian principals, we hereby confirm to the Staff that consistent with its disclosure in the Schedule TO, the tender offer is not the first step in a series of transactions undertaken with the purpose or reasonable likelihood of producing a “going private effect” as specified in Rule 13e-3. As disclosed in the Schedule TO, the Trian principals and Trian Funds intend to review their investment in Wendy’s/Arby’s on a continuing basis. Depending on various factors, including, without limitation, Wendy’s/Arby’s financial position, results and strategic direction, price levels of the common stock of Wendy’s/Arby’s, conditions in the securities and credit markets and general economic and industry conditions, the Trian principals and Trian Funds may take such actions with respect to their investment in Wendy’s/Arby’s as they deem
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appropriate. The Schedule TO has been revised in response to Comment No. 1. See Items 5 and 6 of the Amendment.
Item 7. Source and Amount of Funds, page 19
| 2. | Consistent with the requirements of Item 1007(b) of Regulation M-A, pleasedisclose whether there are alternate financing plans if the primary plans fallthrough and if not, so state. |
Response
The Schedule TO has been revised in response to Comment No. 2. See Item 7 of the Amendment.
Item 10. Financial Statements, page 19
| 3. | You indicate that financial statements are not applicable. Please provide uswith an analysis in support of your statement. In this regard, we notedisclosure on page 2 of the Offer to Purchase that the bidders do not believetheir financial condition is material to an investor’s decision whether to tenderin the offer. A bidder’s financial statements may be material in the context of atender offer for less than all outstanding target securities by non-reportingentities. See Instruction 2 to Item 10 of Schedule TO. Because none of thebidders appear to a public reporting company,eachbidder may be required tosatisfy the financial statement requirements of Item 10 of Schedule TO. Pleasebe aware that adding new, material information in an amended filing mayrequire dissemination of that information to shareholders and an extension ofthe offer. |
Response
The Purchaser does not believe that its financial statements are material to a shareholder’s decision to sell, tender or hold the securities sought in the offer. We acknowledge that Instruction 2 to Item 10 of Schedule TO states that financial statements are not considered material, when among other things, the offer is for all outstanding securities. We note, however, thatFinal Rule: Regulation of Takeovers and Security Holders Communications Release No. 33-7760 (October 26, 1999)(“Release No. 33-7760”)states thatInstruction 2 is merely a safe harbor and is therefore not the exclusive means for determining whether financial statements should be deemed material. Indeed, Instruction 1 of Item 10 indicates that the facts and circumstances of the tender offer should be taken into account in determining whether the financial statements of the Purchaser are material.
As disclosed in the Schedule TO, the offer consideration consists solely of cash and the offer is not subject to a financing condition. The Schedule TO further states that the offer consideration will be paid from the Purchaser’s existing cash and cash equivalents and/or margin borrowings and the Purchaser’s ability to realize cash upon sale of liquid securities. Release No. 33-7760 indicates that the offering of all cash
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consideration and the absence of a financing condition are factors that support a determination that the financial statements of the Purchaser are not material.
Release No. 33-7760 also states that a factor to be considered in determining whether the financial statements of the bidder are material is “the ability of the bidder to pay for the securities sought in the tender offer.” We note that the Trian Funds and the Trian principals are well-known investors with a history of making substantial investments in major corporations such as Wendy’s/Arby’s. As disclosed in the Forms 13F filed on behalf of the Trian Funds with the Commission on November 13, 2008, as of September 30, 2008 the Trian Funds owned approximately $2.7 billion in publicly traded marketable securities. Additionally, the funds have cash and cash equivalents on hand in amounts sufficient to pay the entire $166 million offer consideration in the event the offer is fully subscribed. Given the amount necessary to consummate the offer and the Purchaser’s record of completing transactions, we believe stockholders have all of the material information necessary to evaluate whether the Purchaser has sufficient capacity to make payment for shares tendered in the offer.
Footnote 195 to Release No. 33-7760 states that “financial information also can be material when a bidder seeks to acquire a significant equity stake in order to influence the management and affairs of the target.” Prior to the commencement of the offer, the Trian Funds and the Trian Principals were one of Wendy’s/Arby’s largest shareholders and, as disclosed in the Offer to Purchase, owned in the aggregate approximately 11.1% of the outstanding shares of Wendy’s/Arby’s. Further, Mr. Peltz is non-executive Chairman, Mr. May is non-executive Vice Chairman and Mr. Garden is a director of Wendy’s/Arby’s. The Purchaser’s purpose in making the offer is to increase its equity investment in Wendy’s/Arby’s and the Purchaser believes that the increase in its equity investment from approximately 11.1% to approximately 19.6% (assuming the offer is fully subscribed) will have no incremental effect on the Trian Funds’ or Trian principals’ pre-offering relationship with Wendy’s/Arby’s, its board of directors or management.
While the Purchaser and its affiliates were granted a waiver under Section 203 of the Delaware General Corporation Law (“DGCL”) to acquire up to 25% of the outstanding shares through the tender offer and/or subsequent acquisitions of shares, to the extent Purchaser or its affiliates or associates increase their aggregate beneficial ownership in the shares to greater than 25% of the outstanding shares, the Purchaser and its affiliates and associates will be subject to the restrictions of Section 203 of the DGCL, which will restrict any business combination between the Purchaser and its affiliates and Wendy’s/Arby’s. Moreover, the Purchaser and the Trian principals have agreed that until November 5, 2011, subject to certain exceptions, the Wendy’s/Arby’s board of directors will continue to be comprised of at least a majority of independent directors and that any related party transactions between Wendy’s/Arby’s and the Trian Funds and its affiliates must be approved by a committee that is comprised of independent directors. These restrictions limit the Trian Funds and Trian principals’ ability to exert additional influence or control over the management and affairs of Wendy’s/Arby’s, even if the offer is fully subscribed. Indeed, as structured, control of the management and affairs of Wendy’s/Arby’s will lie with its independent directors.
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Based on the foregoing, the Purchaser believes that its financial statements are not material and are not required to be included in the Schedule TO.
Offer to Purchase
Summary Term Sheet. page 2
| 4. | Briefly disclose the terms of the agreement dated November 5, 2008 in theSummary section. |
Response
The Schedule TO has been revised in response to Comment No. 4. See Item 1 of the Amendment.
“Who is offering to buy my shares...,” page 1
| 5. | Please supplement your answer to clarify the relationship of the filing personsto the company currentlyandhistorically. For example, in addition todescribing the share ownership currently held by the filing persons, include adescription of when Messrs. Peltz, May, and Garden were appointed to theirpositions in the company and their relationship (including former positiontitles) with the pre-merger company, Triarc International, Inc. |
Response
The Schedule TO has been revised in response to Comment No. 5. See Item 1 of the Amendment.
“Why are you making this offer...,” page 2
| 6. | Please clarify within the response under this heading that notwithstanding thewaiver and limitations imposed by the DGCL, the filing persons are notprevented from acquiring greater than 25% of the voting securities of thecompany and currently intend to acquire additional securities subsequent to theexpiration of the tender offer. |
Response
The Schedule TO has been revised in response to Comment No. 6. See Item 1 of the Amendment.
U.S. Federal Income Tax Consequences, page 12
| 7. | Investors are entitled to rely on this discussion. Accordingly, please delete thestatement that the discussion “is not a complete analysis” of all the potential taxconsequences. |
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Response
The Schedule TO has been revised in response to Comment No. 7. See Item 4 of the Amendment.
Section 12. Background and Purpose of the Offer; Plans; Use of Securities, page 18
Background and Purposes, page 18
| 8. | We note disclosure that the filing persons intend to increase their investment inWendy’s/Arby’s through acquisition of additional common stock ofWendy’s/Arby’s subsequent to the expiration of the current tender offer.Consistent with the requirements of Item 1006(c) of Regulation M-A, pleasesupplement your disclosure to discuss whether you have intentions of launchingadditional tender offers as a means of increasing your share ownership. |
Response
The Schedule TO has been revised in response to Comment No. 8. See Items 5 and 6 of the Amendment.
Item 13. Conditions to the Offer, page 21
| 9. | A tender offer may be conditioned on a variety of events and circumstances,provided that they are not within the direct or indirect control of the bidder, andare drafted with sufficient specificity to allow for objective verification that theconditions have been satisfied. With this in mind, please remove the referenceto the conditions being satisfied or waived in your sole discretion regardless ofthe circumstances giving rise to such condition, including the “action ofinaction” of Wendy’s/Arby’s. |
Response
The Schedule TO has been revised in response to Comment No. 9. See Item 4 of the Amendment.
| 10. | You disclose in paragraph (c) that a condition exists if the purchaser “becomesaware of any fact which, in the reasonable judgment of purchaser, has or mayhave material adverse significance, with respect to either the value ofWendy’s/Arby’s or any of its subsidiaries or the value of the shares topurchaser.” Your disclosure should be revised to allow shareholders toobjectively verify the bases upon which you could assert such a condition. Forexample, specify the range of “facts” or circumstances that could trigger such acondition. Quantify, if possible, the severity of a change in either the value ofthe company or the purchaser that would trigger the condition. |
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Response
The condition in subsection (c) of Section 13 of the Offer to Purchase to the effect that Purchaser shall not have become aware of any fact which has or may have “material adverse significance”, with respect to either the value of Wendy’s/Arby’s or the value of the shares to Purchaser would cover a situation where an event occurs or Purchaser becomes aware of facts that do not rise to the level of a “material adverse effect” on Wendy’s/Arby’s, but nevertheless has a significant adverse effect on Wendy’s/Arby’s or the Wendy’s/Arby’s shares. Because the Purchaser is satisfied that many of the circumstances that it intended to address through this condition are adequately addressed by certain other conditions set forth in the Offer to Purchase (i.e., subsections (c) and (d) of Section 13 of the Offer to Purchase) and in light of the Staff’s comment, the Purchaser will remove the aforementioned language as a condition to the offer. The Schedule TO has been revised in response to Comment No. 10. See Item 4 of the Amendment.
| 11. | Refer to the last paragraph of this section relating to your failure to exerciseany of the rights described in this section. This language suggests that once anoffer condition is triggered, the bidder must decide whether or not to waive thecondition. Note that when a condition is triggered and you decide to proceedwith the offer anyway, we believe that this is tantamount to waiver of thetriggered condition(s). Depending on the materiality of the waived conditionand the number of days remaining in the offer, you may be required to extendthe offer and recirculate new disclosure to security holders. You may not, asthis language seems to imply, simply fail to assert a triggered offer conditionand thus effectively waive it without officially doing so. Please confirm yourunderstanding supplementally. |
Response
The Purchaser supplementally confirms to the Staff their understanding that if the Purchaser decides to waive a condition to the offer, depending on the materiality of the waived condition and the number of days remaining in the offer, the Purchaser may be required to extend the offer and recirculate new offer materials to security holders.
General – Bidder Statement
At your request, the Trian Funds and Trian principals further acknowledges that:
| • | the Trian Funds and Trian principals are responsible for the adequacy and accuracy of the disclosure in the Schedule TO; |
| • | Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the Schedule TO; and |
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| • | the Trian Funds and Trian principals may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
The Purchaser believes that none of the revisions or clarifying amendments made to the Offer to Purchase as set forth herein or in Amendment No. 1 being filed concurrently herewith constitute material changes in the information sent to the Wendy’s/Arby’s shareholders; therefore, the Purchaser does not currently intend to send any supplemental materials to the Wendy’s/Arby’s shareholders.
Please do not hesitate to contact me at 212-504-5555 with any questions or comments you may have.
Very truly yours,
/s/ Dennis J. Block
Dennis J. Block
Attachments
cc: Brian L. Schorr, Esq.
